(Reuters) - Canada's Empire Co Ltd (>> Empire Company Limited), parent of Sobeys grocery chain, reported an adjusted profit from continuing operations that missed analysts' estimate as competition intensified.

The company attributed a 40 percent fall in first-quarter net profit to higher promotional activities and expenses related with the acquisition of the Canadian assets of Safeway Inc (>> Safeway Inc.).

Empire bought Canada Safeway for $5.7 billion in June to bulk up its business as U.S. retailers Wal-Mart Stores Inc (>> Wal-Mart Stores, Inc.) and Target Corp (>> Target Corporation) expand in the country.

Loblaw Cos Ltd (>> Loblaw Companies Limited), Canada's biggest grocery chain, consolidated pharmacy assets with a C$12.4 billion deal to buy Shopper's Drug Mart Corp (>> Shoppers Drug Mart Corporation) in July.

Empire's total sales increased to C$4.61 billion ($4.46 billion) in the quarter ended August 3 from C$4.51 billion a year earlier.

Analysts on average had expected revenue of C$4.72 billion, according to Thomson Reuters I/B/E/S.

Sales at Sobeys, Empire's food retailing unit, rose 2.2 percent to C$4.59 billion.

Net earnings from Empire's continuing operations fell to C$82.6 million, or C$1.21 per share, from C$108.1 million, or C$1.59 per share.

Adjusted earnings from continuing operations fell 19 cents to C$1.32 per share, compared with analysts' estimate of C$1.55 per share.

Sobeys, which operates about 1,500 retail outlets under banners such as Lawtons Drugs, Price Chopper, FreshCo, and Thrifty Foods, recorded a 0.1 percent fall in sales at established stores ? an important measure for retailers.

($1 = 1.0333 Canadian dollars)

(Reporting by Krithika Krishnamurthy in Bangalore; Editing by Joyjeet Das)